Public Bill Committee

[Sir John Butterfill in the Chair]

Clause 163

The levy

Question proposed [this day], That the clause, as amended, stand part of the Bill.

Question again proposed.

Daniel Rogerson: I welcome you back to the Chair, Sir John. I am sure that the Minister recalls exactly what I was saying when I had to call a halt to my remarks this morning. To recap briefly, I am in favour of the levy in principle, but we need to know far more about how it will work and how it will be negotiated. The document that was handed to us does not fill in a great deal of detail. I appreciate that there is a lot of negotiation and consultation to come, but there is bound to be some dissatisfaction, given that the provision will not be amendable and will instead be subject to the affirmative resolution procedures for secondary legislation.
We must ensure that we are not jeopardising other calls on planning gain, for want of a better phrase. We will return to that issue in our debates on a later clause. I hope that the threat to impose a planning gain supplement will recede into the background as we move towards a satisfactory principle on which the levy could work. We had a discussion earlier, prompted by the right hon. Member for Skipton and Ripon, on whether it is a hypothecated tax. If one wanted to go further, one could call it a tithe—the taking of a percentage of the increase from which developers benefit.
The key to this issue is that we need more detail on the levy. We have the opportunity to debate what little detail there is in subsequent clauses, and I look forward to doing so. I hope that the process by which the levy is framed will be an open one and that everyone will have an opportunity to comment, so that what comes out the other end is workable and does not have unfortunate consequences regarding communities’ aspirations for their future development.

John Healey: Welcome back to the Chair, Sir John. You missed the wide-ranging debate that we had this morning, before we even got to the clause stand part debate, despite Mr. Illsley’s best intentions to keep us in order. Let me deal with the main points that have arisen. I am grateful to the hon. Member for Beckenham for setting out clearly the Conservative party’s position on community infrastructure. The hon. Member for North Cornwall made it clear that the Liberal Democrats support the provision in principle, and I welcome that. Both hon. Members added their general support to the wide range of bodies that are interested in and support a levy, while being anxious that we should get its design and implementation right. I shall return to that point, because it is the reason why we are tackling the legislation, implementation and introduction of the levy as we are.
The hon. Member for North Cornwall stressed the importance of revenue from the levy being additional. We have consistently stressed the importance of that approach, which reflects the Government’s intentions. He also stressed the importance of sub-regions and referred to his experience in Cornwall. He is right to draw the Committee’s attention to that point, which we will come to.
My hon. Friend the Member for Sheffield, Attercliffe queried why we were making the power one that local planning authorities can, rather than should, choose to take advantage of. He also expressed concern about infrastructure planning. It has been established as Government policy, captured first in PPG12 and now in the draft PPS12, that local planning authorities should look systematically at their infrastructure needs. Whatever the extent of the formal incorporation of a community infrastructure levy process in the local development plan framework, it provides a good basis for ensuring that the preparation process and introduction in those areas that want to take advantage of the powers are right.

Clive Betts: I thank my hon. Friend for dealing with that issue. What I was trying to get at was that sometimes, local authorities have not used section 106 powers not because of a definite decision, but because they do not get around to it or have not seen its importance, and have not done what their neighbours have often done effectively. My hon. Friend is right in saying that a local authority may choose not to use CIL powers, but will it have to go through a local development framework process of considering whether those powers would be appropriate in view of the development needs of the area, and come to a view that they would not be—if that is the decision that they eventually come to—in a positive way and through a proper process?

John Healey: There will be a proper process for considering the introduction and appropriate charging level of a CIL. Our starting point and intention for when that seems possible and appropriate is to link it into the local development planning process. We are discussing that in detail with the interest groups, because the local development planning process might not be quite flexible or adaptable enough if it were the only route for a CIL. I shall come to that in a moment, and in considering further amendments.

David Curry: There might be a commercial development in part of a city where a supplementary business rate had been agreed. To be effective, there is likely to be a 10-year programme to raise funds for the sort of projects in mind, which are also infrastructure projects. Would such a new development automatically become eligible for the supplementary business rate, its not having existed, perhaps, when the decision was taken?

John Healey: The right hon. Gentleman illustrates why we are approaching the levy’s development as we are. Within the framework set out in the Bill, there will be much detailed examination of how it might work in practice, and we must determine what the regulatory framework should be. That is one question that might be appropriate for that part of the process.
During our discussion this morning, the hon. Member for Beckenham said that the Government seem to be—she may even have said that the Government are—setting up the community infrastructure levy to fail so that they can introduce the planning gain supplement. That is completely ridiculous. Having led the Treasury’s work on the planning gain supplement for at least two years, I am conscious of the concept’s strengths and weaknesses, and of the concerns that exist about that proposal.
I am strongly of the view that the proposal to develop a community infrastructure levy, as we are doing in the Bill, is a better approach. It certainly has sufficiently widespread support to mean that we have a good chance, if we get the details right, of introducing a measure that could make a significant contribution to meeting the costs of some of the infrastructure that we will need in almost all our local areas in the coming years to support housing and economic growth and, therefore, the prospects and prosperity of local people.

Jacqui Lait: I am grateful for that assurance. Does it mean that, in the interest of speedily getting through the remaining stages of the Bill, the Minister will accept all our amendments that refer to land values, and particularly the amendment that asks for repeal of the Planning-gain Supplement (Preparations) Act 2007? If he will accept the spirit of those amendments, I will happily not move them.

John Healey: My starting point with all amendments tabled by the hon. Lady, and her arguments, is not necessarily to say no but to see whether they have any merit. Without wanting to raise expectations or hopes too high, the answer is, “Wait and see”—on some of them, at least.

David Curry: The Minister mentioned housing growth. I believe that I am right in saying that if there were a development of market housing and social housing, the old section 106 agreement would continue to exist in respect of the social housing. After all, that is what has delivered more than 50 per cent. of social housing in this country over the past few years. Presumably, the community infrastructure levy would apply to market housing, and section 106 would apply to social housing, but no properties would be subject to a double imposition. Is that the case?

John Healey: Not precisely. We will get on to social housing and the interplay between section 106 agreements and what may be appropriate and allowable infrastructure to be funded through a community infrastructure levy. Suffice it to say that our intention and policy aim is to continue to have sufficient levels of affordable housing, principally negotiated through section 106 agreements. However, it seems sensible to have a provision—we will discuss it on a later amendment—such that, if we saw instead a drop-off in the levels of investment and affordable social housing that we need in almost every part of the country, we could at least make the contribution to the funding of affordable housing an allowable element for expenditure that may come from the levy revenues.
The point that I was making to the hon. Member for Beckenham was that this is not the planning gain supplement by stealth. The community infrastructure levy is different in principle, in design and in the purposes for which it is being raised.

Richard Benyon: Further to the point of my hon. Friend the Member for Beckenham, I believe that the hon. Member for North Cornwall referred to the Government’s menacing words about framework legislation for the planning gain supplement remaining on the statute book and being used at some future date. If they are doing something so radically different, what is the point of keeping that measure in the background like a sword of Damocles?

John Healey: We are at risk of pre-empting a debate that we will certainly have on one of the hon. Lady’s amendments, but just so the hon. Gentleman is clear, the legislation for planning gain supplement that is on the statute book is not framework legislation. It would not and could not allow the planning gain supplement to be introduced. It is narrowly drawn paving legislation intended specifically to allow Her Majesty’s Revenue and Customs and other specified authorities the power to spend money in preparation for a possible planning gain supplement.
That is the provision that is on the statute book. It has not been used, no expenditure has been made under its provisions, and when I was the Minister responsible for the Bill in question, I gave an undertaking that such things would not happen unless a policy decision was taken to go ahead with a planning gain supplement. I hope that that is helpful. The hon. Gentleman was talking about its being a framework Bill, rather as one might describe this legislation as being a framework Bill for a community infrastructure levy, but, clearly, it is completely different.
The basis on which we proceed with the proposal for a levy is that the industry has stated that it accepts the case and that it is willing to make additional contributions for infrastructure. It supports the levy, which builds, as many urged us to do, on the existing practice through planning obligations under section 106 agreements.
The question is how best to do that; that is the nature of the discussion that we are having about the Bill’s provisions. Industry has strongly backed that, as members of the Committee heard in the evidence sessions. The framework in the Bill is designed to give us the powers to introduce a levy, the detail and design of which, we propose and have always proposed, will be set out in regulations. The hon. Member for Beckenham described that as cavalier, but I would say that, on the contrary, it is cautious and consultative. The British Property Federation and the Home Builders Federation jointly said that they welcomed the fact that the CIL clauses in the Bill are enabling clauses, because that will provide the necessary flexibility to implement the levy through regulations and guidance as its full details are developed.
That is precisely what we are doing and what we intend to do, and I want to make it clear to the Committee that regulations to introduce a levy under the provisions in the Bill will be subject, as clause 171 states, to affirmative resolution. Therefore, the House will have the chance to debate and scrutinise the proposals we intend to lay later, and those regulations will be laid only after detailed, continuing discussions with those with a direct interest and others and consultation on the drafts of the regulations.
Finally, with regard to timing, I say to the hon. Member for Beckenham, who urges that the regulations should somehow be done and dusted and available in draft by the time the Bill goes to the Lords, that we have been consistent and clear from the start. I had hoped that publishing the policy document on Thursday would have given her a chance to read it over the weekend, as paragraph 83 of that document makes it clear that we aim formally to consult on draft regulations this autumn with a view to finalising them in spring 2009. Regulations will need to be explicitly approved by the House of Commons before becoming law. I commend the clause to the Committee.

Question put and agreed to.

Clause 163, as amended, ordered to stand part of the Bill.

Clause 164

Charging authorities

Clive Betts: I beg to move amendment No. 437, in clause 164, page 93, line 12, leave out ‘which authority’ and insert
‘that the local planning authority (within the meaning of Part 1 of the Town and Country Planning Act 1990)’.

John Butterfill: With this it will be convenient to discuss the following: Government amendment No. 537
Amendment No. 592, in clause 164, page 93, leave out lines 15 to 18.
Amendment No. 37, in clause 164, page 93, line 17, leave out from ‘London’ to end of line 18.
Amendment No. 438, in clause 164, page 93, line 19, leave out subsection (3).

Clive Betts: I will not detain the Committee too long, as this is a point of clarification to ensure that the authority that can collect the levy is the planning authority. That is useful with regard to any symmetry that we need to develop between the LDF process and the CIL, notwithstanding the comments that the Minister has just made about the consultation that is going on about how the two relate to each other. However, there are also concerns within local government and the Local Government Association that the primary body must be the accountable and elected local planning authority for the area. When Sir Simon Milton gave evidence to the Committee, he made the point that local government in general was supportive of the collaborative arrangements between local authorities when they would come together to look at the infrastructure needs of a wider area, typically a city region. I have been a long-term supporter of the concept of city regions and welcome the approach that the Government have adopted of allowing the development of city regions to come about organically, with local authorities determining the best way forward for that area on a voluntary and collective basis.
There is still concern that at some point the Government might decide that a city region authority, rather than a local planning authority, could have the power to decide on and collect the levy, which would be against the spirit of city regions developing by collaboration and collective agreement and could lead to some imposed organisation funding itself through the levy.
A further concern is probably that, given a regional development association’s new strategic planning powers, it might be possible at some stage that the Government will consider it as an authority that could collect, or even determine, the levy for its area. My amendment seeks to specify absolutely and clearly that the authority in question is the local planning authority——the local elected body in the area. It should be responsible not merely for planning policy, but also for the determination and collection of the levy.

Jacqui Lait: Welcome back, Sir John. I have great sympathy with the proposal of the hon. Member for Sheffield, Attercliffe. As he succinctly put it at the end, we have always maintained that only democratically accountable bodies that are capable of raising taxes should be charging bodies.
As we see from the Government’s new clause, they are hoping that RDAs will take over responsibility for planning as well as housing and they will need to fund those responsibilities. The concern is that the RDA could insist on a charge that it would levy as part of the community infrastructure levy, but it would not be democratically accountable to the people from whom it is raising the money or to whom things will be done.
Amendment No. 592 would delete any body other than a local authority from the list of charging authorities in the regulations, including the local planning authority, which I think the Government try to define in Government amendment No. 537. I will leave that to the Minister. The list goes on to specify the Secretary of State, the Welsh Ministers, the Mayor of London, and
“any other authority with responsibility for town and country planning.”
As the RDAs are being given responsibility for planning under the Government new clause, it leaves open the opportunity for them to charge. It also leaves open that opportunity for the Mayor of London, who, as we know, notoriously has control over the London Development Agency on housing and planning under the Greater London Authority Act 2007, which we fought all the way through the Commons, will continue to oppose and do so here.
If I may speak on behalf of hon. Members from Wales on this side of the Committee, I do not think that in principle they would wish Welsh Ministers to have control over local authority expenditure in Wales. Empowering the Secretary of State is possibly the most dangerous of all, because it ties in with our concern, which has not been allayed by the Minister’s comment that, as he was responsible for the Planning-gain Supplement (Preparations) Act 2007, he can say that there is no way that it will ever be invoked. My view would be that if it remains on the statute book, it can be invoked. It concerns a wider audience than Opposition Members that the possibility is, as my hon. Friend the Member for Newbury said, hanging like the sword of Damocles over the development industry. The last thing that we want is the Secretary of State being able to get their hands on the community infrastructure levy and dictate what it should be and to whom. Therefore, we strongly wish to see that only local authorities should have the power to charge. That is not to say that they cannot work at sub-regional level, or that they cannot cross local authority boundaries, which more and more local authorities are willing and wishing to do, so that they can develop in a way that suits all their communities, but only the local authority should be the charging body, and no other body should be able to levy the charge.

Daniel Rogerson: I am grateful to the hon. Lady and the hon. Member for Sheffield, Attercliffe for raising this issue because it will concern a lot of people, particularly with regard to the regional development authorities. Does she think that local authorities will have the power, if they are making the charge, to spend it or to hand it over to other bodies? Earlier, I raised the question of health facilities, which would be provided by the PCT or the strategic health authority. The concern is that there would be a desire in the community for a health facility, but the only people who could charge the money would be the local authorities. Do they have the power to hand over that money?

Jacqui Lait: It is not for me to interpret the non-existent rules and regulations for the community infrastructure levy or even the guidance, sparse as it is. However, as I understand it more and more local authorities are working closely with the health authorities, the police and a range of other bodies to come to a coherent view on what is required within their communities. That is certainly developing in the outer-London suburbs and I hope that it is the same in Cornwall. Provided that that situation remains robust, there is no reason why the local authority cannot be the agreed charging authority on behalf of all those who are looking towards the community infrastructure developments.
That situation would apply for a jointly agreed road. I will cite the example of a road going from Bexhill to Hastings, which involves Rother district council, Hastings borough council, East Sussex county council and even the South East England Development Agency. The local county council will build the road and will be tolling it. That is already working on a property basis and there is no reason why it should not. That should free up the sort of housing that the Minister wishes to see.
On that basis, when we get to it, I would like to press amendment No. 592.

David Curry: I am still confused about who does what in all of this. There is such a thing as a charging authority. In my constituency, Harrogate council and Craven council are the charging authorities, but there is a whole raft of precepting authorities, of which the county council accounts for the biggest chunk of the council tax bills. There are also the police, fire services and flood defence agencies, so a string of people have the right of precept. What will happen in practice? Even if it is called by another name, will other authorities be able to precept the levy?
Will the levy be an accumulation of the needs of different authorities? After all, if a housing estate is built in some parts of the world, issues such as refuse collection will fall on one tier of local authority and other issues, such as highways and schooling, will fall on a different tier. Will that be worked out by an informal agreement, or is there some mechanism by which costs will be apportioned to permit precepting?
What will be the role of organisations like development corporations? Just as a detail, does the Olympic delivery body have the right to precept or levy the charge? The biggest development in the country is probably the Olympic development in the east end of London. I guess that Hackney is the lead authority on that.

Jacqui Lait: I am grateful to my right hon. Friend for giving me this opportunity. It is the Mayor who precepts on behalf of the Olympic development authority and, until we have a change of Mayor, the current Mayor is threatening to precept the London boroughs to infinity.

Hon. Members: And beyond!

David Curry: That causes two reflections. The first is how glad I am that my constituency is 250 miles north of London. The second is that if the Conservative candidate were to win the mayoral election, it would be regarded as a victory by both sides of the House. I would like the Minister to clarify some of these matters. He says it is a framework Bill, but it is difficult but it is difficult to understand that until we know what is to happen inside it. The detail is everything in this sort of legislation. In the case of a project that makes calls upon infrastructure for which different bodies are currently responsible, is there a precepting mechanism for the allocation of that, or is it done by collaboration? It sounds like a tedious, bureaucratic question, but tedious bureaucracy lies at the heart of many of the things we have to deal with.

David Jones: I add my voice to the note of concern raised by the hon. Member for Sheffield, Attercliffe and my right hon. and hon. Friends. According to subsection (2), one of the potential charging authorities is the Welsh Ministers. The Welsh Ministers are a very acquisitive bunch of people. They are acquisitive both in terms of legislative competence—we shall shortly debate potential framework powers to give them legislative power in this area— and finance. The Local Transport Bill, which is before Parliament, seeks to give them the right to impose road charges on trunk roads in England and Wales. When I see the Welsh Ministers are a potential charging authority, I immediately react with alarm.
I am also concerned that the clauses relating to the application of the proceeds of any levy are very widely drawn. I am worried that a CIL charge, referable to a project in my constituency of Clwyd, West, could find itself being applied to a project in Cardiff, or even Cardiff, South and Penarth. That is not the sort of result that I would be keen to see but it seems to be a consequence of the very wide terms in which the application powers in the clause are drawn.
I seek reassurance from the Minister that if the Welsh Ministers were indeed to be the charging authority in respect of any CIL charged in Wales, they would be obliged to apply the proceeds of that levy to the local authority area in respect of which it is referable. The Minister said this morning that this was an important power that the Government intend to put in the hands of local planning authorities. I seek reassurance that that power will remain with the relevant local planning authority and not disappear into the coffers of Cardiff bay.

John Healey: Perhaps we can start at the starting point. There is wide recognition that the sort of infrastructure that we shall look to this levy to help support and fund can often be outside the local authority’s boundaries. That infrastructure can be just as critical to the potential growth and prosperity as infrastructure within those boundaries and in some cases can relate to the specific development site.

Alun Michael: I endorse entirely what my hon. Friend is saying. It makes the reference to Cardiff, South and Penarth a few moments ago quite appropriate. The impact on traffication and access to rail services as a result of the development in the Sport City in Cardiff bay has serious implications for the traffication in the Vale of Glamorgan council area. Indeed, one of the strengths of the recent arrangements is that payments from the Cardiff Bay development were applied to it.

John Butterfill: Order. First, this is a long intervention and, secondly, it is going rather wide of our discussion.

John Healey: I enjoy these detailed discussions in Committee, which often come up with new, ground-breaking terms. “Traffication”, which my right hon. Friend has just introduced into our debate, is one that I will treasure and savour. I may even find an opportunity to use it at a later stage if I can find an appropriate way of doing so.
The starkest example of the argument was made by the hon. Member for Milton Keynes, South-West (Dr. Starkey), the Chair of the Select Committee on Communities and Local Government, which shadows the work of the Department. On Second Reading, the hon. Lady pointed out the importance of junction 13 on the M1 to Milton Keynes. As she said, the junction is critical to the future success and growth of Milton Keynes, but it is in a different local authority area, a different county and a different region, hence the argument for having a system that is capable, in the right circumstances and in the right way, of delivering a portion of the levy that can support such infrastructure. That is what the provisions in this part of the Bill are designed to do, as our policy document, which was published last week, set out clearly.

Jacqui Lait: The Minister for Local Government and his fellow Ministers regularly say that they want to devolve powers to local authorities. If that junction on the M1 is so important, the local authorities will be well aware of it. Why will the Minister not allow the local authorities to come together across county boundaries and artificial regional boundaries to decide themselves what they want to do and let them get on with it? Why does he not trust them?

John Healey: Indeed we do. We are giving them the power to choose to introduce a community infrastructure levy and the potential to collaborate and pool some of the proceeds of it from their areas. That is our starting point and the main basis of the Bill. However, there may be circumstances in which that approach will not work and in which there is a stronger case for having a community infrastructure levy at a regional or sub-regional level, and the amendments provide the means to do so.
It is precisely that tricky territory that we are discussing in detail at the moment. We are consulting on how best to ensure that we have a community infrastructure levy regime that could be used in such circumstances to support the infrastructure. It is important to retain the flexibility that is set out in clause 164(2) to allow that to be done.
Amendment No. 592 seems designed simply to prevent the Mayor of London becoming a charging authority and being able to impose a community infrastructure levy. I am not sure whether the hon. Lady consulted the hon. Member for Henley (Mr. Johnson) about removing that power, and I do not know whether she is aware that, were she to do so, she would create a £300 million black hole in the potential finances of the Crossrail scheme. The consequences of the hon. Lady’s pressing her amendment to a Division could be much wider than she might realise, and it would rule out the possibility of an important element of Crossrail funding.
The hon. Lady gave us the lovely image of the Mayor of London taxing to infinity to support the Olympics. With several of my hon. Friends, I chime, “to infinity and beyond.” The hon. Lady may not have children as young as mine and those of some of my hon. Friends and she may not know that that was a reference to Buzz Lightyear. I thought at the time that perhaps it had gone over her head, just like the jokes that other hon. Members have shared about West Ham.

Jacqui Lait: I understand the jokes, I just do not appreciate them.

John Healey: Perhaps I had better move on before you rule me out of order, Sir John.

John Butterfill: I would be grateful.

Bob Neill: West Ham always go towards infinity, as we know, and occasionally get a goal.
The Minister referred to the Mayor of London’s plans and to Crossrail. Nothing under our amendment would prevent the London boroughs through which Crossrail will run from levying the community infrastructure levy and entering into an agreement with Transport for London or the Mayor as to any apportionment between them. That works frequently under section 106 agreements. Does he accept that it is a bit of a red herring to raise the loss of Crossrail? Will he also find time to read the very interesting remarks made by the hon. Member for Henley, in which he talks about his determination to work as a partner of the boroughs, rather than in confrontation with them? That approach would fit exactly with the proposition that we make.

John Healey: I have not made a habit of studying the remarks of the hon. Member for Henley, and I do not propose to do so.
Amendments Nos. 37 and 592 would prevent other bodies that have town and country planning responsibilities from being empowered to charge the levy. That would remove the flexibility that we think will be important to encompass possible future changes to planning responsibilities. For example, we are consulting with interested parties about whether the IPC should be able to charge the levy for nationally significant infrastructure projects. I stress that clause 164(2)(e) will not permit the Secretary of State to make regulations empowering regional development agencies to become CIL authorities, which the hon. Member for Beckenham was very exercised about. That is because they currently have no responsibilities for town and country planning.

David Curry: I thought that we had finished discussing the IPC a little while ago. I had not realised that it might be a taxing authority. The Minister has just told us that the IPC might raise the levy. Should we not have been discussing that when dealing with the IPC? It is a rather big afterthought.

John Healey: It is not an afterthought at all. I am making the case for the flexibility that we propose in the Bill for decisions that we will take, after the required discussions and consultations, over which authorities should be appropriate planning authorities. Those will be set out in regulations and will be subject to the established scrutiny and debate process through the affirmative resolution procedure of this House.
I want to deal with the question of the regional development agencies and to reassure the hon. Member for Beckenham as far as I can. Because of the amendments that we propose to make to the Bill, it may be that in future an RDA could take on some of the planning functions that are currently carried out by regional assemblies. Subsection (2)(e) gives a discretionary power for the Secretary of State—it is discretionary rather than a requirement—to make
“any other authority with responsibility for town and country planning”
a charging authority. That could not apply to RDAs at present. It could apply to them in a region where there is an agreement between an assembly and an RDA for the RDA to take on some of the planning functions, as we have proposed in a new clause. We have no intention of empowering regional planning bodies, whether in their current form or as regional development agencies, as CIL charging authorities.
Amendment No. 438 would also prevent the regulations from permitting or requiring charging authorities to act jointly. We need the regulations to be able to enable or require authorities to act as a charging authority as if they were one body, without being challenged for acting under the dictation of another, or for fettering their discretion. For instance, if local planning authorities have developed joint core strategies, it may make sense for them to be joint charging authorities for the purpose of the CIL. I would have thought that the hon. Member for Beckenham and her right hon. and hon. Friends would be looking to encourage that sort of thing, rather than prevent it.
Finally, amendment No. 438 appears to remove the possibility that the regulations could allow a different approach to deciding on the charging authority in different cases or circumstances. Given that not all areas are the same, administratively, geographically, or economically, a certain degree of flexibility seems reasonable and justified. That is why Government amendment No. 537 enables regulations to empower certain local authorities that are not local planning authorities to charge the community infrastructure levy. In that instance, we are responding to concerns that have been raised with us by bodies that might come into that category, such as national park authorities.

Daniel Rogerson: I do not know the answer to the question that I asked the hon. Member for Beckenham earlier on, but the Minister may be able to provide it, as it is a crucial question for me. Under section 106 agreements currently, are the moneys collected by the local authority, then handed over to other service providers, such as those for health? That is only an example; there may be other key areas that it wishes to fund. Or are those side agreements brokered as part of the section 106 process by the local authority?
If it is felt necessary to set down in the Bill exactly which authorities can have a call on that money, and if some authorities that are not planning authorities, such as primary care trusts, are not specified, does the local authority have the power to hand money over to them as opposed to brokering an agreement whereby the developer pays the money straight to the PCT? I appreciate that that may be a technical question. Health facilities are mentioned in the document that has been published so far, so I am assuming that local authorities are able to do that. I would be grateful if the Minister confirmed that that was the case.

John Healey: That is a different question, which is connected not with the provisions of the Bill but with the operation of section 106 agreements. I understand that local authorities do have the scope to do as the hon. Gentleman suggests. I will check that matter out and, if I need to, I will contact him further about it.

Clive Betts: I shall raise two matters. My hon. Friend has answered the question about the RDA directly, which I am pleased about.
On the matter of the sub-regional arrangements, along with the LGA, my feeling is that charging authorities should come together as a planning authority collectively and voluntarily to provide appropriate arrangements. I think that I heard my hon. Friend correctly when he said that, essentially, the powers in amendment No. 164 are discretionary for the Secretary of State, and that there will be ongoing discussions with the LGA and other interested parties to find the most appropriate way to achieve those objectives. On the basis of that reassurance, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 537, in clause 164, page 93, line 14, at end insert—
‘(aa) a county council, a county borough council, a district council, a London borough council, a metropolitan district council, the Common Council of the City of London or the Council of the Isles of Scilly,’.—[Mr. Healey.]

Amendment proposed: No. 592, in clause 164, page 93, leave out lines 15 to 18.—[Mrs. Lait.]

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 10.

Question accordingly negatived.

Clause 164, as amended, ordered to stand part of the Bill.

Clause 165

Liability

Daniel Rogerson: I beg to move amendment No. 573, in clause 165, page 93, line 28, at end insert ‘and’.

John Butterfill: With this it will be convenient to discuss amendment No. 574, in clause 165, page 93, line 30, leave out from ‘it’ to end of line 33.

Daniel Rogerson: We have discussed the issue of rising land values a little so far. Indeed, the hon. Member for Meirionnydd Nant Conwy mentioned the issue of capital gains tax and we explored the fact that there might be issues that increase land value other than the planning permission being granted at that point, such as the gradual increase over time. I am hoping to probe the Minister’s view on that issue.
When one talks to the volume house builders, they all claim that land banking does not occur and that it would not be in their interests because it would be terrible for them to take on land and leave it sitting when they could be building houses on it. However, anecdotally, one hears of areas of land on which builders not only have an option but have bought up and have planning permission for but which has not been built on for some time. The hon. Member for Meirionnydd Nant Conwy mentioned an area in his constituency where planning permission had been granted but that had held back other development because it met the demonstrated need in the area, even though the properties were not built for a number of years.
If the level of CIL and its implications are determined in any way according to the land value at the time when planning permission is granted and the development does not subsequently occur for some time, my concern is that that could be an incentive to get that CIL agreement early, even though costs will rise in the future. There might be a concern that that the costs will be higher later, when builders seek to carry out the development, and smaller developers will not want to incur the cost earlier on, but will want to do so at the time when they are getting the return on the investment. However, that might not be an issue for bigger developers who decide that they can carry the cost as part of their overall financial management and would rather take the cost of the CIL earlier. A later increase in land value would mean that the cost of the CIL could be higher, but they will not have to worry about it because they will have paid it at a lower rate. The purpose of the amendment is to see whether the Minister has considered that possibility and thinks that it should be taken account of.

Jacqui Lait: I seek some information from the Minister. Much of the levy appears to be based on the fact that land values will continue to increase, but they may at least mark time and could go down. If land values go down, I wonder whether the levy will go down, how flexible it is and whether the Minister has done any modelling—I use the word advisedly—to see how effective a levy would be if the land values and the value of the development went down.

John Healey: The developers say that they want certainty about how much will be payable. They want that before they start development. They want that as far as possible while they are arranging their financing. That is why they are keen, as we are, to see the CIL set out in a charging schedule rather than calculated on a site-by-site basis as in the previous proposal for a planning gain supplement. So they want certainty about how much is payable. They want the certainty before they commence the development or arrange the financing. That is often only possible after the grant of the permission. We are linking the levy to the planning permission.
To answer the hon. Member for North Cornwall, under town and country planning provisions, planning permission is generally limited to three years, unless the development is then commenced. We are not talking about an infinite period. There is also provision, and we are looking at the appropriate way to do this, for indexing a charging schedule. Were that indexing or some form of buoyancy to be attached to the charging schedule over time, it is certainly conceivable, were the market or inflation to go down, for it to be reflected in that way. As the hon. Lady will appreciate from the provisions in the Bill, these are areas of quite fine detail. We are looking at them closely at the moment. They will develop as we find a sensible way forward when we have had the chance to discuss this in detail with those who have an interest in the provisions.

Daniel Rogerson: I was interested to hear what the Minister had to say about indexing. We have discovered a little bit more about the proposals that are under discussion so it is all part of the ongoing revelation of how the levy can work. On the question of planning permission being valid for only three years, the case that was brought to our attention by the hon. Member for Meirionnydd Nant Conwy was on the basis that enough development had occurred to allow the planning permission to remain live, even though the rest of the development was halted. I accept that that is a rare case. My concern was that in terms of financial considerations over the levy, it does not provide any form of incentive for that sort of thing to happen further. I am grateful to the Minister for his response. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 538, in clause 165, page 93, line 29, after ‘owner’ insert ‘or developer’.—[John Healey.]

Clive Betts: I beg to move amendment No. 444, in clause 165, page 93, line 33, at end insert—
‘(d) CIL is not payable by incorporated companies whose primary purpose is the provision and operation of infrastructure and whose profits are applied solely for that purpose.’.

John Butterfill: With this it will be convenient to discuss amendment No. 593, in clause 165, page 93, line 33, at end insert—
‘(d) CIL shall not be payable in respect of development carried out by registered charities’.

Clive Betts: This is a probing amendment. I understand that the Minister will be reluctant to agree categories of exemptions from CIL. Indeed, it was interesting that during our hearings into the planning gains supplement, although probably not agreeing with the details and some of the complications of the PGS, a number of organisations were supportive of the idea of some form of charge being levied on those who benefited from planning permission that allowed them to develop a particular piece of land. At the same time, they were very much in favour of exemption for themselves and similar organisations from such charges. That is often the case with such proposals.
I am trying to tease out the possibility of the law of unintended consequences applying to CIL and whether there might be one or two perverse developments as a result. The issue was initially raised with me by Network Rail, which, by definition, is a developer and maintainer of infrastructure. As I understand it, because of the way CIL will be constructed without any exemptions, it is entirely possible that when a new railway is developed or an existing railway expanded, Network Rail could be charged for a CIL that contributes to improving the road system in the area. With the Government policy of encouraging the development of public transport, it would seem a little perverse if the development of railways gave rise to extra funds to build new roads. That is only an extreme example, but it is a possibility.
The issue has also been raised by the National Housing Federation and the Home Builders Federation. They asked whether a development by a housing association, which by its very nature is not seeking to make profit out of the development of land, will be subject to CIL. We are trying to use section 106 to encourage the provision of more affordable housing, but on the site next door there could be a housing association development that has to pay CIL. That would reduce the resources that the housing association has to provide social housing. Is there any scope for Ministers to look at the unintended effects that CIL might have in reducing the resources for the provision of social housing when the general intention is that there should be a greater provision of social housing through funds available from the benefits of development?
My final issue goes a little further than the amendment, but is in the same spirit. In a situation where a house builder wants to build a private development, but negotiates a section 106 arrangement to build a number of social housing units as part of it, will CIL be levied on the social housing as well? In other words, will the developer be asked to pay section 106 money on the social housing as well as the CIL, particularly if CIL is a levy based on the roof tax, as in the Milton Keynes arrangement?
These are interesting issues that probe the consequences, which might not be intended, of what I think is the very good proposal of CIL. However, it is one that we need to get right in detail, as the Minister has said repeatedly.

Jacqui Lait: Amendment No. 593 would go further than the amendment No. 444 and would bring in another category for exemption. We are seeking clarification from the Government on charities. All of us as MPs and as subscribers to charities know how strongly they feel about having to pay VAT, and one has a great deal of sympathy with that view. They are asking whether they will also have to pay CIL, given that many charities wish to make property developments for things such as church halls, school halls, new houses for their vicars and ministers, and community sports facilities. Historically, charities have built many social housing developments, of which there are a number in my constituency.
Charities are rightly asking whether they will be asked to pay CIL when they are using charitable money donated by the public that was not foreseen to be used as a contribution towards infrastructure. Much of what the charities will do in developing property will be to provide social infrastructure out of their own pockets. It will be a double whammy for anyone who contributes to charity fundraising. Again, it is another consequence of sparse detail, and I hope that the Minister can reassure the charities in the wider world, and me.

John Healey: For reasons that I will explain in a moment, I cannot give the hon. Lady the reassurance that she thinks she wants. She says that she supports the levy in principle, and I therefore encourage her to reflect on its purpose and the justification for it, which is that the basic goal of a community infrastructure levy is for every development to pay a fair share towards the infrastructure that may be required in the area in which it is located. At this stage of our thinking, we believe it is right that most types of development are liable to pay a levy, subject to what is a low, but important, de minimis threshold, because almost all development has some impact on the need for infrastructure, services and amenities.
The current system of planning obligations does not have any automatic exemptions for a specific type of developer or development. That reflects a planning system that is blind to what developers do with their profits or to whether a developer is also a registered charity, because it is irrelevant to the impact of their development on the local community.
The range of interests and representative organisations that believe they have a special case for an exemption is much wider than Network Rail, housing associations and registered charities. That is not surprising; virtually everyone feels that they have a case for the levy not applying to them. However, at some stage this year, when we have been able to discuss the matter in more detail—it will be the basis for a public consultation—we will set out our approach to exemptions. In doing so, we will ensure that any potential qualification for exemption must be fair and justified and refer to an objective set of criteria or there may, at least, be a risk of falling foul of state aid legislation.
I can reassure the hon. Lady that we will discuss in detail with charities and others—that includes those that have already approached us or those she might wish to point in my direction—whether they could qualify for an exemption from the levy. Our approach is linked to the purpose of CIL and our starting point is that the large majority of developments, irrespective of the developer, should justifiably be liable to pay the levy.

Jacqui Lait: I am slightly concerned and I hope that the Minister takes this on board. Let us suppose that a new faith school is needed, the community recognises that need, the school is built, property prices in the area go up and so do the number of cars that go to that school. If the faith organisation involved in building the school worked with the local authority through the local development framework and was a recipient of the community infrastructure levy, would that organisation also have to pay the levy?

John Healey: I hoped that that was clear from what I said earlier. I cannot give the hon. Lady a categorical answer to a “What if?” situation.
Our principal starting point is that almost all developments will have some imposition and impact on the need for associated or related infrastructure in the area, and some call on the services or amenities. Our rationale for the basic goal of the levy is that every development should pay a fair contribution towards those costs. If we are to consider any categories for exemption, we must do so carefully and with sound debate, as they would have to be in keeping with the purposes that we have set out for the levy.

Clive Betts: Again, we have returned to the Minister saying that there are further discussions to be had. I generally accept his premise that the presumption is that everyone will pay a levy unless there is a good reason for a particular type of organisation not to. However, I still think that there is a discussion to be had about the effect on social housing in particular. He has said that concerned organisations that have approached the Department, or which do so in the near future, will be party to the discussions, without any promises as to their outcome. On that basis, I beg to ask leave to withdraw the amendments.

Amendment, by leave, withdrawn.

Jacqui Lait: I beg to move amendment No. 595, in clause 165, page 93, line 33, at end insert—
‘(d) CIL is payable only in respect of development which—
(i) generates a significant extra demand for existing infrastructure, or
(ii) requires the provision of significant new infrastructure.’.
This is another probing amendment that, in a sense, follows on from the amendments on charities, because we are again trying to get the Minister to ensure that CIL would not be used by central Government or other bodies to replace their spending, or to replace, repair or create unrelated projects.
We want CIL to be used primarily for local infrastructure that is agreed locally. Some of the Minister’s comments have left me worried that regional and national bodies will be able to charge directly for developments that are outside the locality and do not affect local regions.

John Healey: The hon. Lady needs to understand that regional or national bodies could not charge; it is the Secretary of State’s power potentially to charge on their behalf.

Jacqui Lait: That terrifies me even more, because it takes the debate straight back into the field of taxation and the worry of my right hon. Friend the Member for Skipton and Ripon about hypothecated taxation. However, we will probably return to that matter on Report. I am sure that Sir John will be concerned that we do not go down that route now.
The amendment is intended not to tease out from the Government the accuracy of my comments about whether it is the regional development strategy or the Secretary of State who will charge, but to ensure that the infrastructure levy is not used to replace spending that should come legitimately from bodies outside the local region and is not spent on projects that are not local. If he can reassure us on that, I will be happy to withdraw the amendment. It is designed to get an assurance on the record that the Government will not take CIL money for their own objectives.

John Healey: I have two short answers for the hon. Lady. First, we have been consistently clear that the purpose, intent and effect of the levy will be to raise funding that is additional to what the Government are already prepared to put forward to support growth, and the document is clear about that. Secondly, it will be done specifically to support infrastructure and is not, as she put it, for the purposes of the Secretary of State.

Jacqui Lait: I remain unconvinced that the money raised by CIL will not be taken away from the local area and community and used for matters outside their control. However, I am prepared at this stage not to press the amendment and will undoubtedly come back to it on another occasion. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

John Healey: I beg to move amendment No. 539, in clause 165, page 93, line 35, at end insert ‘and’.

John Butterfill: With this it will be convenient to discuss Government amendments Nos. 540 to 544.

John Healey: Government amendment No. 540 will ensure that CIL regulations can make provision for liability to arise in relation to general consents, such as those granted by local development orders under the Town and Country Planning Act 1990. Essentially, we are seeking for development permitted under such orders also to be able to pay the levy, because such development could clearly give rise to infrastructure but would automatically be exempt without the amendment.
The other amendments will ensure that the regulations can define the point at which planning permission is deemed to first permit the development, which is the time at which the extent of the civil liability is to be determined under the clause. That is necessary to ensure that the amount of CIL to be paid is correctly calculated with reference to the scheme that is permitted. I hope that that is helpful.

Amendment agreed to.

Amendments made: No. 540, in clause 165, page 93, line 38, leave out ‘called))’ and insert ‘called, and whether general or specific))’.
No. 541, in clause 165, page 93, line 38, leave out ‘and’.
No. 542, in clause 165, page 94, line 1, leave out paragraph (c).
No. 543, in clause 165, page 94, line 2, at end insert—
‘, and
(d) the time when planning permission first permits development (and the regulations may, in particular, include provision about outline planning permission and provision treating permission as having been given at a particular time in the case of general consents).’.
No. 544, in clause 165, page 94, line 2, at end insert—
‘(3A) The regulations must include provision for determining which owner or developer is liable in respect of development; and the regulations may, in particular—
(a) define “owner”;
(b) define “developer”;
(c) provide for joint liability (including joint and several liability);
(d) permit one or more persons to assume sole or joint and several liability;
(e) permit one or more persons to assume joint and several liability with a person who is liable in accordance with the regulations;
(f) provide for liability in default of assumed liability;
(g) provide for transfer of liability (assumed or otherwise);
(h) make provision about notices.’.—[John Healey.]

Question proposed, That the clause, as amended, stand part of the Bill.

Jacqui Lait: I hope that I will not detain the Committee for long. Some questions arise on the clause as a whole. We dealt with it in small pieces, but there is the bigger picture. Could the Minister enlighten us on the question of liability to pay? Precisely what size of development does he think should be liable for the charge? There was some merriment earlier when I referred to building a retirement house in the garden. Would that one house be liable? Would a farmer who has permitted development rights be liable to pay CIL if he wanted to change his buildings and processes?
There was also a reference to Network Rail. Most of the infrastructure developers have put forward very eloquent pleas not to be liable for CIL. I can understand that liability where they are building the actual development, but associated developments might be opened up to it because of the infrastructure development. Would there be a difference between the infrastructure provided and the potential opened up by the fact that a new road needs to go into a port or nuclear power station, or round a generating station or grid provider? If land is opened up that belongs to that infrastructure developer, would they be liable for CIL on that land? Would the developer of the land opened up be liable because, say, a road has gone in? Could the Minister enlighten us on those broader questions?

John Healey: Our starting point is that, as I have said before, the liability for CIL should apply widely to almost all developments, unless we become convinced that there is a strong case for exemptions. We are looking at that and we will make decisions and proposals later. But as we stated in paragraph 78 of the document published last week, we do not want complexity for those very small developments, so there will be a de minimis threshold. I said earlier that it would be a low de minimis threshold but as the document states, we do not intend the liability to arise in relation to householder development by homeowners and, subject to further consultation, some further permitted development, such as walls, roof extensions and so on, might also not be liable for CIL.

Jacqui Lait: Is the Minister saying that a householder will not be liable for CIL if they build a room in the roof, but they would be liable if the garden was big enough for them to build their retirement home in?

John Healey: The hon. Lady heard me say that that is exactly the sort of thing that we are considering at the moment. We intend to introduce a low de minimis threshold. Nevertheless, it will be a de minimis threshold below which liability for the CIL would not apply.

Jacqui Lait: And the infrastructure point?

John Healey: The short answer to the hon. Lady’s point is, were the piece of land that she has talked about to be identified in the charging schedule as attracting a liability for CIL, it would attract such liability.

Question put and agreed to.

Clause 165, as amended, ordered to stand part of the Bill.

Clause 166

Amount

Jacqui Lait: I beg to move amendment No. 597, in clause 166, page 94, line 10, leave out ‘determining the amount of CIL’ and insert
‘local planning authorities to determine the amount of CIL as part of their local development plan process.’.

John Butterfill: With this it will be convenient to discuss the following: Government amendments Nos. 545 to 548.
Amendment No. 588, in clause 166, page 94, line 20, after ‘descriptions’, insert ‘, locality’.
Government amendments Nos. 549, 38 and 551.
Amendment No. 599, in clause 166, page 94, line 27, leave out paragraph (d).
Government amendments Nos. 552 to 554.
Amendment No. 600, in clause 166, page 94, line 30, leave out subsection (5).
Government amendments Nos. 555 and 559.

Jacqui Lait: There is nothing like being defeatist, but we are unlikely to get very far with this issue. However, we believe that local authorities should set the amount for the infrastructure levy, not the Government. We are considerably concerned about how flexible it will be. We have tabled that proposal in the amendment.
I see from Government amendment No. 38 that the Minister and I are of one mind, technically, although I suspect that we are coming at the issue from different angles. I am therefore very interested to hear what his view is. We are looking to take out the references to land value, as part of our continuing campaign to ensure that the planning gain supplement cannot be brought back in any way, shape or form. I cannot imagine that the Minister will use that argument.
Amendment No. 600 would ensure that there is a right of appeal against the CIL. Currently, that can be done through the planning appeals system and we would like to hear whether the Government are prepared to incorporate an appeals system that is part of a well-known process, such as the planning appeals process. This point was put to us quite forcibly by the Home Builders Federation, and I am sure that the Minister has also heard its arguments. That is somewhat ironic because the Home Builders Federation is one of the organisations that succeeded in persuading the Government to go down this route. If the Minister would clarify that point, I would be grateful.

Clive Betts: I want to raise two issues: first, land values, which is of great concern to me. There has rightly been a lot of discussion in Committee of the fact that we have not received the detail of the regulations, which will eventually determine whether, and how well, CIL works.
In our very useful evidence sessions we heard from a range of different organisations that will ultimately be involved in the levy implementation: the British Property Federation, the Home Builders Federation and the CBI, which represent those who will have to pay it; and organisations such as the Royal Town Planning Institute, whose members are likely to be involved in its calculation and collection. One thread of concern that ran throughout those sessions was the issue of valuation.
When the Select Committee considered the planning gain supplement some time ago, there was support for a mechanism to collect some of the private gain that results from planning permission being given. But virtually every organisation that gave evidence expressed concern about how it would operate, especially on the issue of valuation. Both the evidence given to the Select Committee and the Committee’s report reflected genuine concern about how the calculations would be done. The Committee considered the options that had existed on land in the past and how they would affect the calculations, but no one had an answer to how to deal with the issue.
When the proposals were introduced, the Minister said that we would proceed with them, but that if someone had a better idea they could come forward with it. Some organisations got together and suggested a planning charge, which has become the community infrastructure levy. What drove them was the wish to get away from trying to calculate increases in value as a result of planning permission being granted on particular sites.
I am not a valuer and I do not understand some of the complex issues that were raised in the Select Committee, but what clearly emerged from the evidence was that everyone was worried that the levy would become as complicated as the planning gain supplement if the issue of value remained. The intention of all those who proposed an alternative to the planning gain supplement was to get away from the issue of value. Will my hon. Friend the Minister therefore explain why it was essential to include value when so many other variables can be used to determine a levy at local level, although I agree that that can be done differently by different authorities to reflect the needs of their areas in different ways?
My second point is about locality, which may be covered by a Government amendment. Another point that emerged in evidence was that what might be appropriate in trying to raise a levy in one part of a local authority area—for example, an affluent suburb where there is a new housing development—might be a very different matter in, say, a housing market renewal area. The local authority might try to encourage developers into a renewal area with a view to uplifting the general value of housing, and it might be inappropriate to levy such developers at the same level as those in a more affluent area. A local authority needs to be able to vary the levy according to the locality in which the development takes place. Government amendment No. 549, which will
“permit or require charging schedules to operate by reference to the nature or existing use of the place”
would allow that variation between different areas where development might take place. Could my hon. Friend reassure me that that variability between developments in very different areas will be possible under his proposals?

John Healey: On the question of value, to which we keep returning, I am clear, as is the industry, that viability is a central concern when setting the community infrastructure levy. It is a central feature in the design of the system and has to be if we are concerned that a levy might choke off development rather than support it. Industry representatives and others, from the British Property Federation to major developers, have told us what we believe to be the case: that it is important to have some reference to value, and therefore viability, in the Bill, and it is hard to see how any assessment of viability can take place without some reference and consideration to land value.
We are in discussion with the industry about whether a more appropriate indicator or a better proxy—my hon. Friend referred to this—could be used for the value that is created by development. As things stand, however, we believe that it needs to be an element of the design of a charging structure. For it to be capable of being taken into account, it needs to be referred to, and that is why I continue to encourage members of the Committee not to accept amendments that would knock it off the face of the Bill.
In addition to infrastructure planning, local authorities will need to produce a draft charging schedule that sets out the rate, and perhaps also the formula, for determining how the levy might be calculated in their area. To answer my hon. Friend’s second point, it is conceivable, in the terms that we intend the levy, that if the infrastructure requirements of different areas within the same local authority boundaries require and justify a different levy charge, that could be incorporated and reflected in the charging schedule.
We have also made it clear that the process of setting charges should ideally be embedded within the development plan process, which is something that we will look to do and that my hon. Friend is keen on. However, the process for setting the community infrastructure levy must at the same time also be flexible enough to respond to changing market conditions. While we are clear that there needs to be a thorough and proper expert testing of the charging schedule, I am keen to avoid a situation in which further delays could be caused to local authorities bringing their development plans up to date.
There is still a question that we need to settle: whether incorporating the development of the charging schedule entirely and solely within the development plan process might be too slow and unresponsive to allow us to design it in the way that we want. We are clear, however, that it has to be plan-led and based on an infrastructure plan, and that devising a charging schedule is the way in which we will avoid one of the principal pitfalls that people saw in the planning gain supplement, which is site-by-site valuations with all the complexities and some of the uncertainties that would come as a result.
I hope that amendment No. 600 is also a probing amendment, as it would remove the requirement for regulations to provide an appeal mechanism on matters of fact against the calculation of the levy in individual cases. We intend the provision that the amendment would otherwise compromise to be a safeguard for resolving factual disputes about the basis of charging CIL in an individual case. For instance, it might be that the charge is calculated by reference to the square meterage of different uses in a development proposal, and there could be a disagreement between the developer and the local authority about the quantum of that square meterage. Otherwis,e judicial review would be the only means to resolve a dispute that was based on facts about the correct level to pay. I hope that those comments are helpful.

Jacqui Lait: The amendment was probing because, frankly, unless there is a little more detail for us to debate, it is difficult to get sufficient information from the Government. The more we can extract from them, the easier it will be. We will consider their response and will probably return to it at a later stage. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 545, in clause 166, page 94, line 16, at end insert
‘(which may include provision for consultation, for the appointment of an independent person or a combination).’.
No. 546, in clause 166, page 94, line 16, at end insert—
‘(2A) The regulations may permit or require charging authorities, in setting or revising rates or other criteria—
(a) to have regard, to the extent and in the manner specified by the regulations, to actual or expected costs of infrastructure (whether by reference to lists prepared by virtue of section 167(3)(a) or otherwise);
(b) to have regard, to the extent and in the manner specified by the regulations, to actual or expected increase in value arising from planning permission (calculated in accordance with the regulations);
(c) to have regard, to the extent and in the manner specified by the regulations, to actual or expected administrative expenses in connection with CIL;
(d) to have regard, to the extent and in the manner specified by the regulations, to values used or documents produced for other statutory purposes;
(e) to integrate the process, to the extent and in the manner specified by the regulations, with processes undertaken for other statutory purposes;
(f) to present the rates or other criteria in the form of a document (a “charging schedule”);
(g) to produce charging schedules having effect in relation to specified periods (subject to revision).’.
No. 547, in clause 166, page 94, line 17, leave out ‘authorities’ and insert ‘schedules’.
No. 548, in clause 166, page 94, line 20, leave out ‘calculation’ and insert ‘charging schedules to operate’.
No. 549, in clause 166, page 94, line 21, at end insert—
‘(aa) permit or require charging schedules to operate by reference to any measurement of the amount or nature of development (whether by reference to measurements of floor space, to numbers or intended uses of buildings, to numbers or intended uses of units within buildings, to allocation of space within buildings or units, to values or expected values or in any other way);
(ab) permit or require charging schedules to operate by reference to the nature or existing use of the place where development is undertaken;’.
No. 38, in clause 166, page 94, leave out lines 22 to 24.
No. 551, in clause 166, page 94, line 25, leave out ‘refer to, or permit,’ and insert
‘permit or require charging schedules to operate by’.
No. 552, in clause 166, page 94, line 27, leave out ‘refer to, or permit,’ and insert
‘permit or require charging schedules to operate by’.
No. 553, in clause 166, page 94, line 27, after ‘used’, insert ‘or documents produced’.
No. 554, in clause 166, page 94, line 29, after ‘permit’, insert ‘or require’.
No. 555, in clause 166, page 94, line 31, at end insert—
‘(6) In this section a reference to publication includes a reference to making available for inspection.’.—[John Healey.]

Clause 166, as amended, ordered to stand part of the Bill.

Clause 167

Application

John Healey: I beg to move amendment No. 556, in clause 167, page 94, line 34, at end insert—
‘(1A) In subsection (1) “infrastructure” includes—
(a) roads and other transport facilities,
(b) flood defences,
(c) schools and other educational facilities,
(d) medical facilities,
(e) sporting and recreational facilities,
(f) open spaces, and
(g) affordable housing (being social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008 and such other housing as CIL regulations may specify).
(1B) The regulations may amend subsection (1A) so as to—
(a) add, remove or vary an entry in the list of matters included within the meaning of “infrastructure”;
(b) list matters excluded from the meaning of “infrastructure”.’.

John Butterfill: With this it will be convenient to discuss the following: Amendment No. 443, in clause 167, page 94, line 35, after ‘specify’, insert ‘that charging authorities are to determine’.
Government amendments Nos. 557 and 558.

John Healey: The amendment sets out the types of infrastructure for which CIL could be used. The list includes items of infrastructure that are currently commonly secured through planning obligations. The list is intended to be illustrative, rather than exclusive or exhaustive. It includes items over which some doubts have been raised, such as “open spaces”.
Hon. Members will note that the list includes affordable housing. To be clear, our intention and preference is that affordable housing should continue to be delivered on-site through negotiated section 106 agreements, which have proved successful in many areas in ensuring that we secure mixed communities in important developments. However, the Campaign to Protect Rural England and other bodies have expressed the concern—indeed, the CPRE expressed it in its evidence to the Committee—that the community infrastructure levy should not lead to a reduction in the provision of affordable housing. While we do not initially intend to include affordable housing within the scope of what may be funded by CILs, we propose to include it within the definition of infrastructure so that if it is later demonstrated that affordable housing is necessary, it could be included as part of CIL.
We recognise that the priorities for infrastructure may change over time. Several years ago, few of us would have put flood defence as high up the list of infrastructure priorities associated with growth as it is now. The Government amendments provide for the definition of infrastructure in the Bill to be revised to reflect changing needs. Such changes will be subject to the affirmation of this House.
Flexibility is important, but so are safeguards. The Government amendments will enable the creation of regulations that specify what should not be funded by CIL and regulations to require local authorities to publish and make available for public inspection the list of projects to be funded by the levy. Perhaps the converse power to that is the power to create regulations to restrict the ability of local authorities to use the levy for projects that are not included on the list of infrastructure that they draw up.
I hope that hon. Members will see that these provisions are designed to provide greater clarity about the purposes to which the revenue from the levy will be put to deliver the infrastructure that is required for local communities, developments and growth. I am happy to deal with any questions that hon. Members may have and will respond to any points that my hon. Friend wishes to make when he speaks to amendment No. 443.

Clive Betts: I seek reassurance. The Local Government Association is concerned to try to ensure that, fundamentally, it would be for each local authority to come to a view about which infrastructure it wanted to be developed and supported by CIL in its area. The Government amendment includes a wide range of infrastructure that it may be appropriate to fund from CIL. Presumably, as we previously discussed that the process is still to be finally determined, will each local authority look at the needs in its area and be able to select the most appropriate requirements for the development of infrastructure from the list of possibilities that amendment No. 556 indicates will be appropriate?

John Healey: Indeed.

Jacqui Lait: I find myself in a bit of a quandary. On the one hand, we have access to very little information, yet the Minister has set out in the Government amendment the list that will be in the Bill of potential projects for which CIL could be used. I thank him for that. The list includes medical facilities—the hon. Member for North Cornwall may wish to raise this point—so the point about the primary care trust is, in a sense, covered. I would like the Minister to clarify whether within “recreational” he includes cultural facilities, so that we can know whether theatres and art galleries will be included if the local community agrees that it would like to have a theatre or art gallery that cannot be paid for in other ways. That would be helpful.
What worries me is that on the one hand we have so little information, and, on the other hand, the information that we are given, particularly in the list, is prefaced by the Minister saying, “We may not need to invoke it now, but we cannot know whether we will need to in the future. Therefore, the widest possible powers are needed.” We could find ourselves agreeing to something that initially sounds reasonable, but, as he himself said about flood defences, who would have thought 10 or 15 years ago that they would be as important as they are now? We could suddenly find ourselves with a piece of legislation that could be distorted, changed or widened in a way that none of us ever thought of or expected. With the best of intentions, the Minister is trying to cover as much as he can, but by so doing he leaves us open to turning something into legislation that might have consequences which none of us can begin to dream of at this stage.
I would be grateful if the Minister could confirm that small point about whether cultural facilities are included in the list under “recreational”, and just be warned about the concerns that I am beginning to feel about the whole approach to this piece of legislation and the fact that we are being asked to put on the statute book the widest possible powers for CIL. That could cause long-term problems.

John Healey: At this stage, the answer to the hon. Lady is “possibly”.

Jacqui Lait: On culture?

John Healey: On culture. As things stand, if the theatre were used for recreation, it would obviously fall directly within the terms of the amendment. I think that this matter probably requires further discussion and reflection with those with cultural and recreational interests, as well with as local authorities and local planning authorities. Indeed, because we are considering a Bill on the practice of planning obligations, we need to look at the current practice of planning obligations. Should we need to make the list any clearer to deal with any wider concerns, we certainly will.

Amendment agreed to.

Amendment made: No. 557, in clause 167, page 94, leave out line 37 and insert ‘funded by CIL,’.— [John Healey.]

Jacqui Lait: I beg to move amendment No. 601, in clause 167, page 94, line 40, at end insert—
‘(d) ring-fenced funding for community infrastructure to ensure that it is additional to other infrastructure monies.’.

John Butterfill: With this it will be convenient to discuss the following amendments: No. 603, in clause 167, page 94, line 40, at end insert—
‘(d) that such finding should relate to community infrastructure and be in addition to any other infrastructure funding.’.
No. 575, in clause 167, page 94, line 40, at end insert—
‘(2A) The regulations must be consistent with the principle that funding from the CIL should be used to fund projects, or aspects of projects, for which funds have not already been allocated by—
(a) a Government department,
(b) the Scottish Ministers,
(c) a Northern Ireland department,
(d) the National Assembly for Wales,
(e) a local authority, or
(f) a regional development agency.’.
No. 602, in clause 167, page 95, line 3, at end insert—
‘(c) require authorities to use best endeavours to deliver the infrastructure upon which the level of CIL is predicated;
(d) require all other providers of infrastructure involved in the delivery of infrastructure, for which CIL is being levied, to use best endeavours to assist in delivering the infrastructure upon which the level of CIL is predicated.’.
No. 604, in clause 167, page 95, leave out lines 8 to 10.
No. 576, in clause 167, page 95, line 27, at end add—
‘(6) The regulations must require the charging authority to consult—
(a) relevant parish councils,
(b) relevant community councils in Wales, and
(c) relevant community councils in Scotland,
in the areas affected by the development in respect of which CIL is chargeable.’.

Jacqui Lait: The amendments would insert simple wording to ensure that the community infrastructure levy is additional to other streams of infrastructure development funding, and that the organisations providing that other funding do their bit.
It is easy to envisage a situation in which there might be a sudden call on the funds of the relevant governmental body or of an infrastructure developer, so that the funding promised to the community infrastructure levy for the delivery of a project suddenly dries up. That could be because the Chancellor of the Exchequer has decided to reduce that organisation’s budget, or because the financial calculations of the money available for the project were less than robust.
Therefore, we want reassurance that the community infrastructure levy is in addition to the other streams of funding and is not seen to replace it, and that the other funders carry out what they have promised to do, in a timely way. Anyone who has worked with local authorities that are working in partnership with a variety of different bodies will know the difficulty of ensuring that all the money promised to a project is delivered when needed. If the levy is to work, we need to ensure that everyone plays their part at the right time, in the right way, and without penalising the funding of other projects. Our goal is to ensure robust financial management within all the organisations.
Finally, amendment No. 604 excludes administrative expenses. It is easy to see that a project’s funding could be top-heavy on administration, which could absorb a greater share than it should; or that, by sleight of hand, perish the thought, some administrative charges on an area unrelated to the CIL-funded project could suddenly be offloaded on to it. It is important to ensure that the money raised from CIL is not spent on administration when it should be spent on the project.

Daniel Rogerson: The hon. Lady makes a good case for questioning that potential problem. Amendments Nos. 575 and 576 were tabled by my hon. Friend the Member for Carshalton and Wallington and me. They concern the principle of additionality, to which the Minister referred under an earlier clause. I certainly welcome his comments on that. We are concerned that money that had been identified for a local project might now be funded through CIL—I cannot think why we are using a soft rather than a hard “c”. Making a “cilling” does not sound quite so dangerous as the alternative.
I am pleased to hear what the Minister had to say. We would not like to see funding, which had already been identified and hard won after long campaigning or much prioritisation for a particular project in a local area, being diverted away. Our amendments would look at funding infrastructure which is particular to the changing situation and the grant of planning permission. I suspect that the Minister will tell me that that is already what is intended. If he does, it will be good to have that on the record once again.

John Healey: I am sympathetic to the spirit of some of the amendments, but not convinced that they are the right thing to do or that they would help. I shall try to respond to the substance of the points that the hon. Lady and the hon. Gentleman have made. The clause provides that the regulations that we make must require authorities collecting the levy to apply it to infrastructure. It provides that the regulations may specify what does and does not constitute infrastructure. Furthermore, clause 163 makes it clear that infrastructure funded from the levy should support an area’s developments. That is the essence of the levy itself.
Amendment No. 603 appears to seek to establish the principle that CIL spending should be additional to existing infrastructure spending. I am not convinced that it is sensible to legislate for that, but let me say a little bit more about additionality, in addition to the points I have already made which the hon. Gentleman has kindly welcomed.
First, we have said publicly and consistently that it is not our intention for the levy to work in isolation from other revenue streams. It cannot be expected to pay for all the infrastructure required, although as paragraph 47 of the document we published last week indicates, we expect that it could make a significant contribution in some areas to some infrastructure. Secondly, we want to give authorities the flexibility to determine both their infrastructure priorities and how best to allocate their funding streams to ensure that they are properly delivered.
The local authorities will need to assess. They will need to cost the infrastructure they require to support development. In doing that, they should have regard to the level of funding that is likely to be available from other national and regional or local funding sources, including how they use funding sources that are not ring-fenced. It has always been our expectation that the levy will be additional, particularly for larger pieces of infrastructure. In many cases it will provide only a part of the funding required. To underline that I quote directly from our document:
“The Government believes that CIL should not be used for general local authority expenditure, nor to remedy pre-existing deficiencies in infrastructure provision, unless these have been, or will in time be, aggravated by new development.”

Daniel Rogerson: I understand the point with regard to local authorities. However, we have already debated how it might be appropriate for the money raised to be spent through other agencies. It would be good to have it on the record that it would also cover the Highways Agency or any other Government agency, rather than just picking on local government.

John Healey: The hon. Gentleman makes a fair point. The principle that I am seeking to establish is that we want the levy and the revenue raised from the levy to be additional. I hope that a combination of the provisions in the Bill and the consistent declaration of that intent will give the hon. Gentleman the reassurance that he seeks. Also, “additional” would be difficult to define and to put in the Bill.
Amendment No. 604 relates largely to the hon. Lady’s concerns. Subsection (4)(c) permits the application of the levy to administrative expenses related to the infrastructure concerned or to the levy. I understand the hon. Lady’s argument, but the measure will help to give charging authorities the resources that they need to set, collect and enforce the levy, and to plan and deliver the infrastructure that can be funded by the levy. The levy builds on the existing provisions and practice of section 106 and, in a sense, the provisions mirror those under many of the section 106 agreements. They provide, in many cases, for local planning authorities to recoup costs related to negotiations or monitoring of the section 106 agreements, for example. Giving authorities insufficient resources to operate the levy would ensure that the levy is not effective.
The hon. Lady’s concerns about administrative expenditure and efficiency are right, but to preclude levy-related revenues from supporting the sort of work that is necessary to make the levy operate effectively would be a mistake. I hope that her amendment is probing and that she will not press it to a Division. Ensuring that charging authorities have sufficient resources is clearly central to their ability to deliver the levy but, more importantly, to the infrastructure that it is designed to support.
I hope that hon. Members feel that I have given them a sufficient answer and that they do not feel the need to press their amendments to a Division. If they do, I shall ask my hon. Friends to resist.

Jacqui Lait: The Minister was right to say that the amendment is probing and aimed more at getting him to put on record the Government’s approach to the issues. I am grateful to him.

Daniel Rogerson: I am grateful to the Minister for his comments. I suspected that he would say what he said. If he is happy to take on board the point that agencies other than local government could look at the measure as a way to rejig their spending priorities, I shall not press the amendment to a Division.

Jacqui Lait: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 558, in clause 167, page 95, line 3, at end insert—
‘(c) include provision about the circumstances in which a charging authority may and may not apply CIL to projects not included on the list.’.
No. 559, in clause 167, page 95, line 27, at end add—
‘(6) In this section a reference to publication includes a reference to making available for inspection.’.—[John Healey.]

Clause 167, as amended, ordered to stand part of the Bill.

Clause 168

Collection

Jacqui Lait: I beg to move amendment No. 605, in clause 168, page 95, line 35, leave out ‘may’ and insert ‘must’.

John Butterfill: With this it will be convenient to discuss amendment No. 606, in clause 168, page 95, line 41, at end add—
‘(7) Regulations under this section may make provision concerning the holding and investment of funds raised by way of CIL.’.

Jacqui Lait: It is not often that I wish to be prescriptive in my dealings with local authorities—or anyone else, for that matter. However, I want assurances from the Government that the community infrastructure levy does not necessarily need to be paid in money when there are other ways of reimbursing a community. For example, someone could donate land, or construct a facility that does not involve the community other than to ensure that it is what the community wishes. By tabling an amendment that proposes to replace “may” with “must” and by trying to build flexibility into the community infrastructure levy, it makes the levy more easily deliverable by those who are being asked to pay.
Amendment No. 606 would make the levy payable at the beginning of the development. That then begs the question that if money is paid over, will it be used immediately? If it is not going to be used immediately, who is liable for the funds? If it is a large development and it takes two or three years before the infrastructure is in place, or even begun to be built, who benefits from any investment income or interest? What is the flexibility of being able to invest the money? Those sorts of boring practicalities are possibly more in the Minister’s Treasury remit than in the remit of the Department for Communities and Local Government. If the project goes wrong and a poor investment is made, there could be problems. Will he enlighten us on those two very techie points?

John Healey: The hon. Lady puts her points down by describing them as techie. They are both rather important. On amendment No.605, which is designed to probe the issue of payments in money or payments in kind, we are discussing the matter with local authorities and the development industry. We are anxious to get their view on how this might best work. At this point in the process, I believe that the amendment would remove any flexibility for us to draw our conclusions at the appropriate time. I will ensure that she is kept fully informed on any progress that we make.
Amendment No. 606 raises a very important point, which is not just techie but is of significant interest in both senses of the word. We believe that the powers under the provisions for local authority investments cover what the hon. Lady wants. However, I will reflect further on the amendment and if necessary will come back with observations and reflections. We may return to the matter at a later stage if further amendments are required.

Jacqui Lait: As the Minister has been so helpful, I throw in another thought. If the Government are to allow local authorities to issue bonds, will money going into a CIL be useable in local government bonds? That really is techie.

John Healey: It is techie; it goes beyond even the long title of the Bill. However, I will look at the matters raised by the hon. Lady on investment and CIL receipts. If necessary, I will table further amendments to ensure that the issue is covered, and I will update her and other members of the Committee at the appropriate stage.

Jacqui Lait: I am grateful to the Minister for his very positive response and look forward to receiving the information he has promised us. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

John Healey: I beg to move amendment No. 560, in clause 168, page 95, line 38, leave out ‘one’ and insert
‘a charging authority or other public’.

John Butterfill: With this it will be convenient to discuss Government amendments Nos. 561 to 565.

John Healey: These clarifying amendments make it clear that if circumstances require it, a number of authorities may collect the levy on behalf of a charging authority. They also make it clear that authorities empowered to collect the levy on behalf of a charging authority may be other public authorities and not just charging authorities. The other public authorities would collect but not set the levy; the responsibility for setting would remain with the charging authority. The amendments will permit regulations to give us the flexibility to provide for specific local circumstances.
The purpose of amendments Nos. 562 to 565 is to provide greater detail on possible enforcement measures. They confirm and clarify that surcharges may be imposed, provide for the enforcement of payment through civil proceedings, and allow regulations to empower charging authorities to stop development until a community infrastructure levy liability is assumed.
Finally, in the interests of fairness for all those who pay the levy, acts or omissions may warrant criminal prosecutions in some circumstances. Before there is a sharp intake of breath across the Committee, examples might include persistent evasion of payment or the provision of false information relating to payment, and the obstruction and assault of charging authority officers who may be trying to carry out their duty to investigate non-payment, all of which the Government believe could apply to the levy. They are set out in the amendments.
However, there is a question about the proper limits on the term of imprisonment that could be imposed for criminal offences under the levy, and we shall return to that, probably on Report.

Jacqui Lait: Will the Minister enlighten us on the nature of the discussion he has had with the industry about those proposals and where he has got to on that, because while there are good developers, there are also those who are perhaps less than satisfactory? That question arises from a case in my constituency. We discovered a developer who had run out of money and was unable to finish the development, and there is no effective enforcement against him.
Although we will have a community infrastructure levy, there is no effective way to force a developer who runs out of money to finish a development. There is technical enforcement, but no effective enforcement. If a bust developer has paid the community infrastructure levy and is committed to it but does not complete the development, would the powers that come into play then force him to complete the development, and how can that be done when they have paid the community infrastructure levy?

John Healey: I am sorry to hear of the situation in the hon. Lady’s constituency, but those powers are related to the enforcement of the liability to pay the levy. In all probability, were a levy to be part of the system in such a case, the developer would have already paid the levy—

Jacqui Lait: That does not help me.

John Healey: The enforcement powers might not help the hon. Lady with regard to getting the development completed in her constituency, but they are not really designed to do that.

Amendment agreed to.

Amendment made: No. 561, in clause 168, page 95, line 39, at end insert ‘authority.’.—[John Healey.]

Clause 168, as amended, ordered to stand part of the Bill.

Clause 169

Enforcement

Amendments made: No. 562, in clause 169, page 96, line 4, at end insert ‘or surcharge;’.
No. 563, in clause 169, page 96, line 8, after ‘pending’, insert
‘assumption of liability for CIL or pending’.
No. 564, in clause 169, page 96, line 10, at end insert 
‘(including, in particular, offences relating to evasion or attempted evasion or to the provision of false or misleading information, and offences relating to the prevention or investigation of other offences created by the regulations).’.
No. 565, in clause 169, page 96, line 10, at end insert—
‘(g) for enforcement of sums owed (whether by action on a debt, by distraint against goods or in any other way).’.—[John Healey.]

Jacqui Lait: I beg to move amendment No. 607, in clause 169, page 96, line 10, at end insert—
‘(2A) Regulations made under this section may may make provision for land owners and developers to reclaim CIL should infrastructure not be delivered in accordance with agreements.’.
The purpose behind the amendment was brought to our attention by the Royal Institution of Chartered Surveyors. It is a very reasonable question to ask and I look forward to the Minister’s answer. There could be instances in which there is a failure to deliver the infrastructure that has been promised. In previous debates I have cited some possible reasons for failure, such as changes in Government priorities and poor financial control. Will the developers be able to claim back CIL if the partners fail to deliver their part of the bargain? Would the developer have to take the other organisations to court, would there be an automatic repayment, would the developers be expected to go ahead and provide the infrastructure or would the levy automatically transfer to another project? I would be interested to hear the Minister enlighten us with his views on this matter.

Daniel Rogerson: The amendment raises an interesting point. However, I am a little concerned about the way in which it is drafted. The phrase “in accordance with agreements” is a little wide. I can see the point that is being made. An important development might be held up by the lack of infrastructure promised by CIL. However, to say that it must be in accordance with the original agreement implies that it should be in accordance with it to the letter. Issues might arise in the course of delivering a development, for example, through further planning considerations, which mean that it is delivered in a slightly different way. I would hate to see the developer in question being able to take the money back by saying that the result is not exactly to the letter of the agreement.

Jacqui Lait: If I had the resources at my command to get all of my amendments right, I would probably get on a lot better. The same is true for the hon. Gentleman. However, if the Minister is prepared to accept our arguments, we will be very happy to amend the drafting of the amendment.

Daniel Rogerson: I accept the hon. Lady’s point and I am glad that a fine-toothed comb has not been run over the amendments that stand in my name because I am sure that they are not perfect. I can understand her question, but the CIL provisions must be written in a tight, binding way to ensure that developers cannot slip away from their obligations.

John Healey: I, too, am a little concerned about the hon. Lady’s drafting, but I understand the point that she makes in her defence. I am also concerned about the points of substance that the hon. Gentleman mentioned. It is difficult to see how the amendment would work when agreements are not part of the CIL. It will be raised whether or not the owner or developer agrees. As we discussed under the previous clause, an authority might raise and collect the levy liability but then bank it for some time before allocating it to a scheme some way down the track. We would not want the developer to be able to challenge and reclaim the money that they have paid in such circumstances.
To deal with the spirit of the hon. Lady’s point, it is a central element of the design of the levy that it should be raised to support the development of infrastructure. Although we are discussing clause 169, the hon. Lady will see that clause 167(5) provides for regulations to set out requirements on an authority to monitor and report how the levy funds have been raised, how the levy funds have been transferred and how they have been spent. Those requirements to report publicly should help to ensure that authorities charged with delivering planned infrastructure—as a contribution to which they raise the levy—are held to account and can be publicly challenged. I appreciate that that is a different form of accountability from the contractual accountability that the hon. Lady seeks.

Jacqui Lait: Let me give the Minister a “for instance” that might help him. Some years ago, we had bad floods in the south-east after which it was recommended, and agreed by the Environment Agency and the Government, that various flood alleviation works would be carried out. We then had the debacle of the Rural Payments Agency, and the Environment Agency was required to forgo some of its budget so that it could bail out the RPA. That meant that the flood defence works were politely postponed. How would that situation play into what is, I accept, the poorly drafted spirit of the amendment, given that the Environment Agency could not carry out its work? It does not have to be the Environment Agency—it could be any stream of funding—but the Environment Agency could not carry out, for whatever reason, the commitments into which it had entered.

John Healey: To put it terribly politely, the hon. Lady totally misrepresents the scale and the impact of the consequences of the Rural Payments Agency’s problems with the Environment Agency and its investments and programme of flood defences.
It is not a comparable position because we have said consistently that the levy could be spent only on infrastructure development, which clearly is not the case in the hon. Lady’s contention in respect of the Rural Payments Agency and the Environment Agency. I continue to believe that clause 167 does the job.

Sitting suspended for a Division in the House.

On resuming—

John Butterfill: Mr. Healey, you were responding, I think.

John Healey: I did not feel that I had anything further to add.

Jacqui Lait: This is one of those clauses on which the Minister has been relatively helpful. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 169, as amended, ordered to stand part of the Bill.

Clause 170

Secretary of State

Amendments made: No. 566, in clause 170, page 96, line 32, after ‘authority’, insert ‘or other public authority’.
No. 567, in clause 170, page 96, line 33, leave out ‘a charging’ and insert ‘the’.—[John Healey.]

Question proposed, That the clause, as amended, stand part of the Bill.

Jacqui Lait: I want to make the general point that the clause is controlling and centralising, and we are unhappy with the powers it gives to the Secretary of State to direct charging authorities. It also provides the potential for the Secretary of State to reduce Government funding, although we keep being told that that will not happen. In the interest of brevity, we will probably return to the matter on Report, but I wanted to put it on record that the clause gives too many powers to the Secretary of State to direct authorities.

John Healey: The hon. Lady is right that the provision provides powers of intervention to the Secretary of State that could be used to control the imposition, collection or application of the levy. We would envisage using those powers only in exceptional circumstances and as a last resort, if the spending proposed by a charging authority did not meet the purpose of the levy: to provide infrastructure to support an area’s development.
The clause also provides for regulations, which would also be a reserve power that we would use only in exceptional circumstances and as a last resort. It is, nevertheless, important to cap the amount that an authority could levy. We would not anticipate that authorities would set the level of the levy to the extent that it would choke off significant development, but the risk of circumstances in which that could happen remains. Therefore, the powers are important safeguards for both developers and local communities. I understand the hon. Lady’s reservations. None the less, I hope that hon. Members will accept that the powers are important and that the clause should remain part of the Bill.

Question put and agreed to.

Clause 170, as amended, ordered to stand part of the Bill.

Clause 171

CIL regulations: general

Question proposed, That the clause stand part of the Bill.

Jacqui Lait: I do not think that I will get terribly far with my objections to the clause. I have already asked whether the draft regulations will be available for the Lords to consider, as we have not had them, and received a fairly dusty answer.
I think that we are signing a blank cheque in the legislation. I am concerned that the House will have no input into the draft regulations, as we all know that it is, in effect, extraordinarily difficult to amend the regulations when they come before the House through the affirmative or negative procedure. Therefore, I would wish the Lords to have draft regulations, so that they can have a positive debate on much of the detail that we have been unable to obtain from the Minister; although he has been slightly more co-operative than in previous sections of the Bill, and we are beginning to get a bit of a feel for the details. When the regulations do come forward to the House for approval, I hope that the Minister will put them forward under the affirmative procedure.

John Healey: I have two points to make. First, we will absolutely ensure that when the Bill goes to the other place, the Lords are fully informed about the development of thinking behind it, and that they have the maximum information possible, depending on the stage of the discussions and conclusions and any formal consultation required.
Secondly, as I indicated previously, we intend the major regulation-making provisions in this part of the Bill to be subject to the affirmative procedure. Whether through the negative or affirmative procedure, the House will get the chance to re-examine the provisions that may be proposed under secondary legislation.

Question put and agreed to.

Clause 171 ordered to stand part of the Bill.
Further consideration adjourned.—[Mr. Watts.]

Adjourned accordingly at five minutes to Four o’clock till Tuesday 5 February at half-past Ten o’clock.